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GrowMax Resources Postpones Shareholders Meeting and Requires BullRun Capital to Provide Compliant Disclosure on Nominations, Proposed Dividend

TORONTO, Sept. 24, 2018 (GLOBE NEWSWIRE) -- GrowMax Resources Corp. (the “Company” or “GrowMax”) (TSX-V: GRO) announces the postponement of its annual and special meeting of shareholders (the “Meeting”) originally scheduled for Tuesday, September 25, 2018 to October 4, 2018.

In consultation with its advisors, GrowMax’s Board of Directors (the “Board”) has identified serious concerns about the accuracy and completeness of BullRun’s September 18, 2018 press release (the “Release”), issued just days before the proxy deposit deadline, regarding the intention to declare a dividend of $0.075 per share if BullRun’s board nominees are elected at the Meeting. Specifically, the Company is concerned that the Release does not sufficiently explain BullRun’s intention to seek shareholder approval before proceeding with the dividend and fails to adequately address corporate law tests that must be satisfied before a dividend can be declared and paid. Furthermore, it is apparent that BullRun has not disclosed the risks that the dividend proposal would create for GrowMax under the share purchase agreement (the “Agreement”) for the proposed PrimaSea acquisition. For example, under the Agreement, GrowMax has covenanted that it will neither make a commitment nor pay an amount in excess of $50,000 which is not contemplated in the budget furnished to the vendors of PrimaSea without the approval of the vendors. The dividend would arguably constitute such a payment, and could potentially expose the Company to litigation.

Additionally, GrowMax has concerns in light of the proposed dividend that several statements in BullRun’s August 20, 2018 Advance Notice material (the “Notice”) confirming the independence of BullRun’s board nominees appear to be inaccurate. One of such statements in Schedule “C” of the Notice states that none of the Nominating Shareholders has any “arrangement or agreement, the purpose or effect [of] which would be to alter such Nominating Shareholder’s… economic exposure to the Corporation.” However, the economic exposure of each Nominating Shareholder will be offset by the dividend to be paid to the Nominees if elected. A clear example is Mr. Malhi, who the Board calculates would receive approximately $2.1 million of the Company’s cash reserves. The Notice’s inaccurate and apparently false statements deprive the Company and its shareholders of accurate and timely disclosure of matters relevant to vote at the Meeting contrary to the intention of the Board in adopting the Advance Notice By-Law.

The Company has invited BullRun and the Nominees to address these concerns by answering questions about the background facts. Consequently, the Board has decided that the meeting will be postponed for approximately one week, which will provide a period during which BullRun and each of the nominees can respond to the Company’s queries. The Company will update shareholders as appropriate in due course as to the outcome of this process.

“We are committed to ensuring that shareholders have all the information needed to make fully-informed decisions with regard to their votes at the Meeting,” said GrowMax President and CEO Stephen Keith.

/EIN News/ -- Proxies that have already been submitted will continue to be valid for purposes of the rescheduled Meeting. If you have already voted on your BLUE proxy no action is needed. Shareholders who have not yet voted or voted on the dissident’s yellow proxy are encouraged to do so on management’s BLUE proxy. The later dated BLUE Proxy will count as it supersedes any previously submitted proxy. 

The new deadline to vote is 10:00 a.m. (Calgary time), being 12:00 p.m. (Toronto time), Tuesday, October 2, 2018.

If you have questions or need help voting contact Kingsdale Advisors at 1-866-581-1479 or contactus@kingsdaleadvisors.com. There is a team standing by to help.

For more information, please contact:

Stephen Keith, P. Eng.
President and CEO
Tel.: +1 (647) 299 0046
Email: info@growmaxcorp.com
www.growmaxcorp.com

Media Contact:
Ian Robertson                                                           
Executive Vice President, Communication Strategy
Kingsdale Advisors                                                   
Direct: +1 (416) 867-2333
Cell: +1 (647) 621-2646
Email: irobertson@kingsdaleadvisors.com 

Forward Looking Information

Certain statements contained in this news release may constitute “forward-looking information” as such term is used in applicable Canadian and US securities laws. Any information or statements contained herein that express or involve discussions with respect to predictions, expectations, plans, projections, objectives, assumptions or future events should be viewed as forward-looking information. Such information relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Such forward-looking information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of GrowMax to be materially different than those results, performance or achievements expressed or implied by such forward-looking information.

Forward‐looking information is based on management’s beliefs, expectations, estimates and opinions on the date statements are made and GrowMax undertakes no obligation to update forward-looking information and whether the beliefs, expectations, estimates and opinions upon which such forward-looking information is based has changed, except as required by applicable law.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.

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